Cancelling Site C cheaper than pausing construction for a year or more: report

It would cost more to pause construction of Site C than it would to cancel it outright, according to a new study.

The independent report on the $8.8-billion hydroelectric dam was prepared by Deloitte LLP — a major international consulting firm — and posted on the B.C. Utilities Commission’s website late Friday.

Deloitte aimed to answer key questions facing the utilities commission: Is Site C on schedule and on budget; what it would cost to pause the project; and what it would cost to cancel the project entirely.

The report is part of an NDP-ordered rethink of the B.C. Hydro mega-project that was a signature project of the previous Liberal government. The utilities commission will consider the Deloitte documents in compiling its preliminary report which is due Sept. 20.

According to Deloitte, the Peace River project is on time and on budget but is at risk of a significant delay and cost increases if it misses a river diversion scheduled for September 2019.

“If, however, the September 2019 start of river diversion milestone is not achieved and is delayed until September 2020, the project will likely experience the moderate-impact scenario,” Deloitte concluded.

The river needs to be diverted to allow construction of the main dam and that work has to be done when water levels are low at the end of the summer.

Under the scenario of a one-year delay, Deloitte said, the cost of the project would jump by 10 to 20 per cent, leaving Site C at with a final price of between $9 billion and $10 billion.

If the project was set back by more than a year, Deloitte warned, Site C could end up with a final price as high as $12.5 billion.

Aerial view of the north bank of the Peace River at the Site C construction site in July.B.C. Hydro /
PNG

The cost merely to suspend the project and preserve the work already done — to allow for construction to resume in 2024 — would be $1.4 billion. But that figure does not include others costs that arise when construction is re-started, nor does it take into account inflation.

The cost to cancel the project outright would be $1.2 billion, the report said, on top of the $4.5 billion already committed — which includes money already spent, the value of contracts already awarded and other costs. By the end of November, $2 billion will have already been spent on construction, B.C. Hydro has said. So if the project was cancelled, B.C. Hydro would be out as much as $5.7 billion.

Site C is the largest construction project in B.C.’s history. Approximately 2,200 people continue to work at the site.

B.C. Hydro says Site C is necessary to provide clean power for the province’s future needs, but opponents have strongly disputed that assertion.

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